Annual Meetings

What flexibilities exist for California state-chartered credit union annual meetings?

(Updated April 13, 2020) Since early in the crisis, the DBO has said that credit unions can postpone their annual meeting and/or scale back the meeting to an agenda of only the required statutory actions (e.g., eliminating all food/celebrations/giveaways).

The DBO is also permitting virtual annual meetings of members and virtual regular board of director's meetings during the COVID-19 crisis. In guidance dated March 22, 2020, the DBO said they will not criticize credit unions that conduct meetings virtually in violation of the credit union’s own bylaws. No additional guidance is provided regarding virtual meetings. The League recommends your annual meeting notice include appropriate instructions on how to join, participate, and vote during the virtual meeting. We also recommend you consult with your Portfolio Manager and/or legal counsel.

Has NCUA issued any additional flexibility for federal credit unions (FCUs) regarding holding annual meetings virtually?

Yes. In the NCUA Letter to Federal Credit Unions 20-FCU-02, the NCUA states that federal credit unions may adopt by a two thirds vote of its Board of Directors an emergency exception to its bylaws, specifically, the in-person quorum requirement. The bylaws amendment provided in the letter, if adopted, allows credit unions to hold their annual meetings of the members, and special member meetings for authorized purposes other than member expulsion, virtually and without an in-person quorum if certain conditions are met. 

Once federal credit unions adopt the amendment, NCUA stated that federal credit unions can invoke its provisions at any point during the year 2020 for meetings occurring in 2020, if a majority of the board of directors so resolves for each such meeting. If adopting the amendment federal credit unions should review its bylaws to ensure any relevant cross-citations conform to their version of the bylaws.

Keep in mind that general quorum requirements must still be met for all-virtual meetings.

What flexibilities exist for FCUs in planning annual meetings?

The FCU Bylaws permit virtual attendance at an annual meeting provided an in-person meeting is held for those who cannot attend virtually or choose to attend in-person.

An FCU has flexibility to postpone its annual meeting. While there is no law or regulation that prohibits an FCU from postponing its annual meeting, it should provide notice of the rescheduled meeting as required in the FCU Bylaws. Under current circumstances, an FCU might consider delaying its annual meeting until a more appropriate time. An FCU can amend the date of its annual meeting by using the fill-in-the-blank provision in its bylaws with the two-thirds vote of its board, without seeking the NCUA’s approval.

The FCU Bylaws also permit adjournment of a meeting for lack of a quorum, but the reconvened meeting must occur 7 to 14 days after the originally scheduled meeting. In some cases, this provision could provide sufficient flexibility, depending on the date of the meeting.

Finally, the FCU Bylaws allow four options for conducting elections. If a credit union’s board or management determines that a different option would be more convenient, they may amend the credit union’s bylaws with the vote of two-thirds of the directors. Even if a FCU conducts its elections by mail ballot or electronically, however, it still must conduct an annual meeting, with a quorum of members present in-person.

Source: NCUA Actions Related to COVID-19; LCU 20-CU-02

If a FCU delays its annual meeting and election, what happens to the FCU’s Board?

Under the FCU Bylaws, the term of an FCU director continues until “the election and qualification of successors.” Accordingly, if an FCU delays an annual meeting, the current directors’ terms continue until the FCU holds its meeting and election. If there is a vacancy on the Board, the FCU may fill it by a majority vote of the remaining directors. Directors appointed in this manner, however, hold office only until the next meeting.

Source: NCUA Actions Related to COVID-19; LCU 20-CU-02

May a Nevada state-chartered credit union postpone its annual meeting?

Unfortunately, the NV FID Commissioner indicated that there is no wiggle room to allow any flexibility on annual meetings. The Commissioner did note that the statute does not say how the meetings are to be conducted unless it is specific in the credit union’s bylaws. She suggested considering video conferencing or other electronic methods.

The League notes, as it might be helpful in your consideration, that FCUs are not generally permitted to hold entirely virtual annual meetings; however, hybrid (virtual and in-person) are permitted. The NCUA recent permitted virtual meetings without an in-person quorum if certain conditions are met and the FCU board adopts an emergency exception to their bylaws. (Letter to Federal Credit Unions 20-FCU-02.)

Also, we have heard that some credit unions have informed their members the annual meeting is being scaled back because of the COVID-19 which includes eliminating all food/celebrations/giveaways and showing an agenda that indicates only the required statutory actions.

NRS 672.550  Meetings of members

  1. The annual meeting and any special meetings of the members of the credit union shall be held at the time and place and in the manner indicated in the bylaws.
  2. A member may not vote by proxy, but a society, association, co-partnership or corporation having membership in the credit union may be represented and vote by one of its members or shareholders if such person has been fully authorized by the governing body of the society, association, co-partnership or corporation to represent it.
  3. At all meetings, a member has but one vote irrespective of his or her share holdings.